Donald Trump's lawyers once again have asked a New York appeals court to give him a break on the bond he is require to post to stop the state from initiating collection of its $450M (including interest) judgement against him in his civil fraud trial.
His lawyers argue that few of the surety bond firms operating in New York could handle a $450M bond and none of those were willing to accept real estate and collateral (which is not surprising).
It also came out in the reporting that the surety bond firms were requiring him to provide the full amount of the bond as collateral. Now, that's normal, but if the firm felt that he was likely to get the amount reduced on appeal, they could have lowered the collateral amount (multiply the chance they think it will be reduced by the amount of the reduction they expect and that would be the amount by which they should feel comfortable reducing the collateral required).
Early reporting had indicated that Trump was offering $100-200M in cash as collateral at one point. The fact that none were willing to consider that level of collateral--even for the fat $4-12M fee they would likely command for the bond--is quite telling in my opinion. These are professional appeals process handicappers and I think they all think he's going to end up owing it all.
However, all of the surety bond companies would accept an irrevocable letter of credit. There are a lot of very large banks that routinely issue irrevocable letters of credit in the half billion dollar range.
Many of them would be happy to take real estate as collateral.
I think the problem here is that the line of credit would be for Donald Trump.
Let's remember that he needs this bond because he was found to have defrauded his banking and insurance companies for years.
He no longer has a relationship with the primary bank cited in the case--Deutsche Bank--and burned numerous other lenders over the years.
He's toxic.
And I think he may very well be screwed. "I tried hard," is not relevant here.
He was found liable, and unless he posts the judgment amount or a surety bond, Attorney General James is going to be able to start collecting against him. I can't see any good reason for the appeals court to step in here, unless they feel the judge erred obviously and tremendously and I don't think the record supports such a judgment.
The penalties are huge, but so were the advantages in interest rates and insurance rates that Trump received. So, too, were the profits he made in selling assets he was only able to acquire because he was perceived to be in a stronger financial position that was actually the case.
This law is used all the time in New York; maybe not this publicly or on a scale this large, but the judge used it as intended: to keep fraudulent actors from profiting from their fraud.
I think he is going to lose on appeal and I think the surety bond firms of New York believe that too.